Gaeltacht based companies trading with the United Kingdom are significantly more exposed to a disorderly Brexit than the Irish economy in general, according the latest Spending Review by the Department of Public Expenditure and Reform.
This is due to their reliance on the UK as both an export market and a source of raw materials and other imports.
The Review notes that Údarás na Gaeltachta has been working with client companies to boost awareness of available supports, but states: "... previous uncertainty regarding the timeline of Brexit, aligned with the unforeseen impact of Covid-19, has led to a low level of engagement thus far."
It goes on: "Given that a hard Brexit with WTO type tariffs is becoming increasingly likely, the impact on ÚnaG client companies will be substantial."
According the Review, for many Údarás na Gaeltachta companies, Brexit planning has largely been displaced by the requirement to deal with immediate sustainability and liquidity issues triggered by the pandemic.
With 85% of Gaeltacht companies employing fewer than 10 workers, they may not have sufficient staff resources, capacity or specialist knowledge to engage in Brexit preparations, or manage applications for government supports.
The Review describes this capacity constraint as significant in dealing with economic shocks such as Brexit and Covid-19.
The review found that 82% of Gaeltacht firms surveyed had not applied for any Brexit supports, and 53% were unaware that Brexit supports were available.
50% of respondents need help with market diversification, while 45% want to increase operational competitiveness.
The review also highlights the lack of broadband and digital infrastructure in Gaeltacht regions, describing it as "...a major barrier to innovation and competitiveness, as well as limiting their ability to react quickly to changes in the global economy such as the shocks caused by the Covid-19 pandemic and Brexit."
It refers to the potential to attract new remote workers since the pandemic, noting that Údarás na Gaeltachta has invested in a network of co-working hubs, in particular to provide high speed broadband that might enable people to relocate to Gaeltacht areas.
The report urges Údarás na Gaeltachta to make a renewed effort to ensure businesses are supported through the Brexit transition, in particular with market diversification to ensure Gaeltacht companies and employment survive the worst impacts of Brexit and Covid-19.
The recommendations state that rather than supplementing existing supports, Údarás na Gaeltachta should seek to assist client companies to better leverage existing government supports.
The review also urges Údarás na Gaeltachta to seek to repurpose some of the unspent Brexit Loan Scheme funding for enhanced "bespoke" supports taking account of specific issues facing micro and small enterprises operating in the Gaeltacht.
